(a) The purpose of this Part 375 is to describe DOE's general authority in the mineral leasing area and to establish general provisions applicable to DOE's mineral leasing regulations in this Subchapter C.

(b) The mineral leasing regulations issued by DOE pursuant to sections 302(b) and 303 of the DOE Act will be found in this Subchapter C.

(c) Section 303(a) of the DOE Act provides that the Secretary of the Interior retains any mineral leasing authorities not transferred under section 302(b) of the DOE Act and that he is solely responsible for the issuance and supervision of Federal leases and the enforcement of all regulations applicable to the leasing of mineral resources, including but not limited to regulations applicable to lease terms and conditions and production rates.

§ 375.002 Applicability.

The provisions in Subpart A and Subpart B of this Part 375 are applica

ble to all of the regulations in Subchapter C, unless otherwise noted.

§ 375.003 Authority.

(a) Section 302(b) of the DOE Act transferred to, and vested in, the Secretary of Energy the functions of the Secretary of the Interior to promulgate regulations under the Outer Continental Shelf Lands Act, the Mineral Lands Leasing Act, the Mineral Leasing Act for Acquired Lands, the Geothermal Steam Act of 1970, and the Energy Policy and Conservation Act, which relate to: the fostering of competition for Federal leases (including, but not limited to, prohibition on bidding for development rights by certain types of joint ventures); implementation of alternative bidding systems authorized for the award of Federal leases; the establishment of diligence requirements for operations conducted on Federal leases (including, but not limited to, procedures relating to the granting or ordering by the Secretary of the Interior of suspension of operations or production as they relate to such requirements); setting rates of production for Federal leases; and the specifying of the procedures, terms and conditions for the acquisition and disposition of Federal royalty interest taken in kind.

(b) The function of the Secretary of the Interior to establish production rates for all Federal leases was also transferred to, and vested in, the Secretary of Energy by section 302(c) of the DOE Act.

(c) Section 303(c)(1) of the DOE Act requires the Secretary of the Interior to afford the Secretary of Energy not less than thirty days, prior to the date on which DOI first publishes or otherwise prescribes the terms and conditions on which a Federal lease will be issued, to disapprove any term or condition of such lease that relates to any matter with respect to which the Secretary of Energy has authority to promulgate regulations under section

302(b) of the DOE Act. No such term or condition may be included in such a lease if it is disapproved by the Secretary of Energy.

(d) In exercising his authority to promulgate regulations under section 302(b) of the DOE Act, the Secretary of Energy is required by section 303(b) of the DOE Act to consult with the Secretary of the Interior during the preparation of such regulations and to afford the Secretary of the Interior not less than thirty days prior to the date on which the DOE first publishes or otherwise prescribes regulations to comment on the content and effect of such regulations.

§ 375.004 Definitions.

For purposes of this Subchapter C: "Area" or "region" means the geographic area or region over which the USGS designated official has jurisdiction, unless the context in which those words are used indicates a different meaning is intended.

"Designated Official" means a representative of DOI subject to the direction and supervisory authority of the Director, the Chief, Conservation Division, USGS, and the appropriate Regional Conservation Manager, Conservation Division, USGS, authorized and empowered to supervise and direct all oil and gas operations and to perform other duties prescribed in 30 CFR Part 250 (offshore).

"Director" means Director, United States Geological Survey, Department of the Interior.

"DOE" means the Department of Energy, including the Secretary of Energy, or his or her delegate.

"DOE Act" means the Department of Energy Organization Act (Pub. L. 95-91, 91 Stat. 565 (42 U.S.C. 7101 et seq.)).

"DOI" means the Department of the Interior, including the Secretary of the Interior, or his or her delegate.

"Federal lease" means an agreement which, for any consideration, including, but not limited to, bonuses, rents or royalties conferred, and convenants to be observed, authorizes a person to explore for, or develop, or produce (or to do any or all of these) oil and gas, coal, oil shale, tar sands, and geother

mal resources on lands or interests in lands under Federal jurisdiction.

"Gas" means natural gas as defined by the Federal Energy Regulatory Commission.

"OCS" means the Outer Continental Shelf, which includes all submerged lands (1) that lie seaward outside of the area of lands beneath navigable waters as defined in the Submerged Lands Act (Pub. L. 31-35, 67 Stat. 29, (43 U.S.C. 1301)) and (2) of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.

"OCSLA" means the Outer Continental Lands Act, as amended (Act of August 7, 1953, Ch. 345, 67 Stat. 462, 43 U.S.C. 1331 et seq., as amended by Pub. L. 95-372, 92 Stat. 629).

"Oil" means a mixture of hydrocarbons that exists in a liquid or gaseous phase in an underground reservoir and which remains or becomes liquid at atmospheric pressure after passing through surface separating facilities, including condensate recovered by means other than a manufacturing process.

"USGS" means the United States Geological Survey, Department of the Interior.

[45 FR 9530, Feb. 12, 1980, as amended at 45 FR 9539, Feb. 12, 1980]

§ 375.005 Effect on existing regulations.

In some instances regulations issued by DOE in this Subchapter C may supersede, in whole or in part, certain regulations which have been promulgated by DOI. The specific regulations superseded will be identified in the applicable rulemakings issued for codification in this Subchapter C.

Subpart B-Administrative Procedures

§ 375.101 Interpretation.

Any person seeking an interpretation of the mineral leasing regulations in this Subchapter C shall file a written request with the General Counsel of DOE. Each such request shall be processed in accordance with the procedures established in Subpart F of 10 CFR Part 205.

376.302 376.303

Definitions.

Joint bidding requirements. AUTHORITY: Act of August 7, 1953, ch. 345, secs. 2 and 8, 67 Stat. 468 (43 U.S.C. 1331 and 1337), as amended by sec. 205, Pub. L. 95-372, 92 Stat. 462 and 629; secs. 302, 303 and 644, Pub. L. 95-91, 91 Stat. 578-579, 579580, 599 (42 U.S.C. 7152, 7153 and 7254); E.O. 12009, 42 FR 46267.

SOURCE: 45 FR 9539, Feb. 12, 1980, unless otherwise noted.

For purposes of this Part 376:

"OCSLA" means the Outer Continental Shelf Lands Act (Act of August 7, 1953, ch. 345, 67 Stat. 462 (43 U.S.C. 1331 et seq.), as amended by Pub. L. 95-372, 92 Stat. 629).

"OCS lease" means a Federal lease for oil and gas issued under the OCSLA.

"Person" includes, in addition to a natural person, an association, a State, or a private, public, or municipal corporation.

bids are received, announced and recorded.

"Production

period" means the period during which the amount of oil and gas produced from a tract, or, if the tract is unitized, the amount of oil and gas as allocated under a unitization formula, will be measured for purposes of determining the amount of royalty payable to the United States.

"Qualified bidder" means a person, who has met the appropriate requirements of 43 CFR 3316.

"Tract" means a designation assigned solely for administrative purposes to a block or combination of blocks that are identified by a leasing map or an official protraction diagram prepared by DOI.

"Value of production" means the value of all oil and gas production saved, removed or sold from a tract, or, if the tract is unitized, the value of all oil and gas production saved, removed or sold and credited to the tract under a unitization formula, during a production period, which value is determined in accordance

§ 376.110(b).

§ 376.110 Bidding systems.

with

(a) A single bidding system selected from those listed in this paragraph shall be applied to each tract included in an OCS lease sale.

(1) Cash bonus bid with a fixed royalty rate of not less than 121⁄2 per centum in amount or value of the production saved, removed or sold and an annual rental. (i) The royalty rate to be paid by the highest responsible qualified bidder shall be a percentage of the amount or value of the production saved, removed or sold. Such royalty rate shall not be less than 121⁄2 per centum at the beginning of the lease period in amount or value of production and shall be specified in the notice of OCS lease sale published in the FEDERAL REGISTER.

(ii) the amount of cash bonus to be paid is determined by the qualified bidder submitting the bid. Any deferment and the schedule of payments shall be included in the notice of OCS lease sale published in the FEDERAL REGISTER.

(iii) The annual rental to be paid by the highest responsible qualified

bidder shall be the amount specified in the notice of OCS lease sale published in the FEDERAL REGISTER.

(2) Royalty rate bid based on per centum in amount or value of the production saved, removed or sold, with a fixed cash bonus and an annual rental. (i) The royalty rate to be paid is determined by the qualified bidder submitting the bid and shall be based on a percentage of the amount or value of the production saved, removed, or sold.

(ii) The cash bonus to be paid by the highest responsible qualified bidder shall be an amount specified in the notice of OCS lease sale published in the FEDERAL REGISTER.

(iii) The annual rental to be paid by the highest responsible qualified bidder shall be the amount specified in the notice of OCS lease sale published in the FEDERAL REGISTER.

(3) Cash bonus bid with diminishing or sliding royalty rate of not less than 122 per centum at the beginning of the lease period in amount or value of the production saved, removed, or sold, and annual rental. (i) (A) The royalty rate to be paid by the highest responsible qualified bidder shall be a percentage of the amount or value of the production saved, removed or sold. The royalty rate shall be calculated by utilizing either a sliding scale formula, which relates the royalty rate established thereby to the adjusted value of the oil and gas produced during the production period, or a schedule that establishes the royalty rate that will be applied to specified ranges of adjusted value of production. The description of the sliding scale formula or schedule shall include the relationship between adjusted value of production and royalty rate, and a stipulation of the lowest royalty rate and highest royalty rate. The sliding scale formula or schedule shall be included in the lease issued to the person who is the successful bidder as one of the lease terms and conditions.

(B) The royalty rate shall not be less than 122 per centum at the beginning of the lease period in amount or value of the production saved, removed or sold and shall be specified in the notice of OCS lease sale published in the FEDERAL REGISTER.